3 stocks I'd buy and hold forever

These 3 shares are bottom-drawer stocks.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are few shares on the ASX that I would truly want to buy and feel safe holding for more than two decades. Industries can change, competitors can come and go, moats can be eroded. There is no guarantee with investing, that's why shares are a risk.

However, there is a small group of shares that I'd be more willing to lock in my money for 20 years, compared to the rest. Indeed, I own shares of all three and plan to hold for many years to come:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the oldest companies on the ASX, having operated for over 100 years and it has also paid a dividend every year for over 100 years, including through wars and recessions.

The business is a conglomerate, it makes large and meaningful investments into companies it believes have good long-term futures. It can change its investments as time goes on, meaning it's more adaptable than most other ASX companies. In this regard, it could easily operate for another century if it makes the right investments.

It has increased its half-year dividend consecutively for the past 20 years and it's currently trading at 16x FY18's estimated earnings.

Ramsay Health Care Limited (ASX: RHC)

Ramsay is the largest private hospital operator business in Australia. I've written many times about how Ramsay has a good tailwind thanks to Australia's ageing population and it's heavily investing for growth.

I think Ramsay could be a hold-forever stock because humans have always needed a centralised place of high-quality medical care for decades, if not centuries. I cannot see technology changing that reality over the next decade or two. Plus, Ramsay has somewhat of a geographical moat with its hospitals, local governments aren't going to approve another hospital to be built close by.

Ramsay is currently trading at 22x FY18's estimated earnings.

InvoCare Limited (ASX: IVC)

InvoCare is the largest funeral operator in Australia and New Zealand. The business may have a long-term tailwind with the number of deaths expected to rise over the years, but I think the sheer fact that a number of people die each year make it a compelling choice – as morbid as that sounds.

The business is almost guaranteed a certain amount of revenue and profit each year because it has such a large market share, meaning it should be able to provide a reliable level of profit and dividends, assuming competition doesn't become a problem. As long as people keep dying, InvoCare will make a profit.

InvoCare is currently trading at 24x FY18's estimated earnings.

Foolish takeaway

I am a firm believer in all three shares, which is why each of them are at least 2.5% of my portfolio. At the current prices I believe that Ramsay will generate the biggest returns over the next five years, but Soul Patts could be the safest choice.

Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited, Ramsay Health Care Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »